The Mortgage Arrears Resolution Process (known as MARP – see summary below) hit the headlines again recently when Minister Joan Burton announced a new free financial advice service for mortgage holders in financial distress.

This new service will be known as the Mortgage Arrears Information and Advice Service and will be limited to those with distressed home mortgages (principal private residences only). In order to qualify for the service, you must already have gone through the arrears resolution process and arrived at the point where your bank or other lender is making a long-term proposal about how to continue with the mortgage (see MARP process below). The advice will be given by an accountant selected by the borrower from a panel and the lender will pay for it.

The scheme has come in for some criticism, mainly because:

• The timing of the advice. Distressed borrowers do need advice and support throughout the resolution process. Whilst you can argue that accountants, financial advisors, MABS, FLAC etc are available at any stage to the borrower, this new free advice service is only available after the bank has made its proposal;

• The offer of advice is only available to those borrowers who have been offered a long-term proposal in relation to home mortgages. This represents a minority of those with distressed mortgages – what about the rest?

In its defence, any scheme which offers access to free professional advice to distressed borrowers must have some merit.

This is just another small piece in the jigsaw of Ireland’s personal insolvency problem. In our next blog, we will summarise the draft Personal Insolvency Bill, which was published at the end of June, and explain the options it may give those in financial difficulty.